We can also see some positive divergences on the Futures:
But exuberance is still well present:
I would like to point out that yesterday's buying occurred during the final minutes of the day. This was clearly end of the month tape painting.
The major issue is that the Q1 S&P500 earnings expectations have fallen from $183.98 on Dec 16, 2022 to $177.67 yesterday. Thas is rather steep. As a consequence, the S&P500 now lies at its top valuation level: it yields the same as more secure corporate bonds.
Conclusions:
If the Fed does not state that it pauses further raising rates, then I believe that the 10Y rates on the secondary market will bounce back up and that equities will pull back.
Better protect gains going into today's announcement.
